Meetings and types / kinds of meetings

Purpose of Meetings:

Meetings in a company provide a platform for directors and shareholders to discuss and develop strategies for growth and development. These meetings serve essential functions, including controlling company affairs, preparing future policies, scrutinizing current policies, and more.

Statutory Meeting:

The first meeting of the company, held once during its lifetime, is known as the Statutory Meeting. Not all companies are eligible to hold such meetings, as only companies limited by shares or guarantee with share capital are permitted to do so. Private companies, regardless of their ownership structure, public companies without share capital, unlimited companies, and government companies are not eligible.

The Statutory Meeting must be held after one month but not later than six months from the receipt of the certificate of commencement of business. Notice of the meeting must be given to directors and shareholders at least 21 days prior to the meeting.

The purpose of the Statutory Meeting is to inform members about the company's financial status and discuss matters arising from company promotion and formation. The meeting covers topics such as:

1. Director and auditor particulars

2. Contract particulars

3. Underwriting contracts

4. Arrears of calls

5. Commissions or brokerage

What happens if a company fails to hold a Statutory Meeting?

If a company fails to hold a Statutory Meeting, it can be adjourned by shareholders. However, if this meeting is not held, it may be grounds for winding up the company.

 

Annual General Meeting (AGM):

As its name suggests, an AGM is an annual meeting of a company, excluding one-person companies. The AGM should be held within a 15-month period, with the first meeting taking place within 9 months from the closing date of the company's first financial year. If this is not possible, it should be held within 6 months from the closing date.

The primary purpose of an AGM is to provide shareholders with an opportunity to receive information about the company's performance, make decisions on important matters, and exercise their rights as shareholders.

Conduct of the AGM:

It is mandatory for the AGM to be held during business hours, between 9am and 6pm, on a day that is not a national holiday. The meeting must be held at the registered office or within the same city, village, or town where the registered office is located.

Importance of an AGM:

The Annual General Meeting serves as a safeguard against shareholder authoritarianism, providing an opportunity for shareholders to raise questions about the company's operations. The meeting also allows for the re-election of retiring directors, the declaration of dividends, and a review of the previous year's activities through a chairman's speech. Additionally, annual accounts are presented at the meeting, and shareholders are authorized to ask questions about the company's accounts and affairs. The ordinary business of the company is also discussed during this meeting.

The Annual General Meeting provides a platform for shareholders to pass resolutions, which are formal decisions made through a voting process. A resolution is a motion that is proposed and arrived at through a conclusion, also known as a proposal or motion. In the context of an AGM, a resolution is a proposal made by the shareholders and when agreed upon, becomes a decision.

Types of Resolutions:

There are several types of resolutions that can be passed at an AGM, including:

1. Ordinary Resolution: An ordinary resolution is a proposal that requires a simple majority vote (more than 50%) to pass. It is used for routine matters, such as the approval of annual financial statements or the appointment of directors.

2. Special Resolution: A special resolution requires a majority vote of not less than 75% to pass. It is used for significant changes to the company's constitution or structure, such as changes to the company's name or capital structure.

3. Unanimous Resolution: A unanimous resolution requires all shareholders present to vote in favor of the proposal. It is typically used for important or sensitive matters that require broad consensus among shareholders.

4. Resolution Requiring Special Notice: This type of resolution requires notice to be given to shareholders prior to the meeting, usually at least 21 days' notice. It is used for significant changes that require careful consideration by shareholders.

5. Resolution Appointing Auditor: This type of resolution is used to appoint or remove an auditor, who is responsible for examining the company's financial records and providing an independent opinion on their accuracy.

6. Resolution Passed at Adjourned Meeting: This type of resolution is passed at a meeting that has been adjourned (postponed) from a previous meeting. It allows shareholders to continue discussing and voting on proposals that were not resolved at the previous meeting.

These different types of resolutions provide a framework for shareholders to make informed decisions about the company's direction and operations, while ensuring that significant changes are made with proper consideration and approval from all relevant parties.